I’ve been paying my student loan for 37 years, but now I’m only earning $11K a year and need to buy food and medication too. What should I do?

Question: I have a student loan from 1984 that I defaulted on. I am 72 years old and have been paying through a deduction in my Supplemental Security Income (SSI) benefits. My annual income is only $11,000. It is becoming hard to decide whether to pay the loan or buy food and medications. After 37 years, is there some way to cancel or forgive this loan?

Answer: It’s no doubt distressing to face decades of student loan payments, and feel you still haven’t made enough progress, but pros say there are things you can do. The first thing to know is that you likely shouldn’t be having your loan payments deducted from your Social Security right now. Indeed, the government has stopped seizing tax refunds or garnishing wages until six months after the payment pause lifts (it’s now scheduled to lift August 31). As such, Leslie Tayne, founder and managing director of Tayne Law Group, says, “I would absolutely contact the servicer and find out what’s going on.”  (Note that while today’s low student loan refinancing rates may be tempting, those with federal loans likely do not want to refi because it strips you of federal protections; however readers with private student loans may want to refinance — see the lowest student loan refi rates you might qualify for here.)

And there are other avenues to pursue to secure a better grip on your student debt, too – like enrolling in an income-based payment plan and pursuing a possible settlement.

Income-driven repayment plans for federal student loans

“My optimistic assumption from reading their question is that this borrower is not currently in default on the loan,” says Andrew Pentis, loans expert and certified student loan counselor at StudentLoanHero. “That’s great because then they could still be eligible to enroll in one of four income-driven repayment (IDR) plans that are designed to keep monthly burdens very low relative to income.” People with very low incomes can get payments as low as $0 on these plans, but note that you must have a federal loan to apply for IDR.

Have a question about getting out of student loan or other debt? Email [email protected].

Given that this 1984 loan is on the older side, the borrower might have to consolidate it with the federal government into a direct consolidation loan to apply for IDR, according to Pentis. “But that’s fairly easy to undertake. It’s best to talk through it with your federal loan servicer  on the phone,” he says, adding that studentaid.gov is improving its website “but it’s still not foolproof.” 

Seek a settlement

Borrowers with old, defaulted federal or private student loans may consider trying to negotiate a student loan settlement. But you’re at the mercy of your lender, according to Anna Helhoski, student loan expert at NerdWallet. 

“Federal student lenders will require your loans to be in or near default to start settlement negotiations, but it’s not the kind of thing you should try to force,” she says. “There’s no guarantee your lender will negotiate and you will damage your credit and face other punitive consequences as a result.”

Generally federal student loan settlements aren’t common because the loan holder can get your money through tax refund garnishment or wage garnishment, according to Helhoski. “Private student loan settlements are also difficult to get,” she says. 

She adds: “But it’s possible you can get them settled if you have a financial hardship, you’ve defaulted more than once or if they otherwise cannot garnish wages or have your tax refunds seized. It’s a potentially extreme option for borrowers to pursue debt settlement, but it might be the only way to get rid of an old defaulted debt that’s weighing them down.” 

Take stock of your endgame 

“I wish I could press a button on a time machine in order to talk to this borrower 20 years ago and put them on the path of receiving forgiveness,” says Pentis, who acknowledges that looking ahead, not backwards, is what is key to building a better financial foundation. “For this borrower, a zero student loan balance is not their goal and likely it’s not a realistic option,” he says. “It’s about keeping their monthly dues under control, so that they can afford everything else that they really need to live.”